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Dem gov. candidates eye tax options

By Michael P. Norton, State House News Service

Updated:
08/08/2018 10:25:30 AM EDT

BOSTON -- When the state's highest court on June 18 knocked off the 2018 ballot a proposed surtax on the wealthy they also torpedoed a core element of the campaign platforms of the two Democrats running for governor this year, Jay Gonzalez and Robert Massie.

Now the candidates are floating alternative ways to raise revenue. Gonzalez, who does not plan to propose a specific tax plan until after he's elected, has mentioned a graduated income tax under which people in different income brackets pay different rates, or just raising the 5.1 percent income tax, or wiping out unspecified existing business tax breaks.

Massie told the News Service he favors higher registration fees on heavy vehicles, property transfer taxes, freeing up revenue by eliminating government waste, and revenues he anticipates Massachusetts could eventually secure by growing its renewable energy base and then exporting power.

The tax-and-spend plans of the two Democrats will contrast in the campaign with Gov. Charlie Baker's claim that he opposes new or higher taxes. While the governor has agreed to some taxes and assessments, he opposes raising broad-based taxes such as the income, sales or corporate taxes, and says he supports a reduction in the sales tax, although he has not proposed such a reduction. Baker, unlike his opponents, has also not outlined any re-election promises.

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Gonzalez and Massie eyed the so-called millionaire's tax, and its projected $2 billion a year in new revenues, to pay for their education and transportation spending plans. The infusion of revenues could have also freed up other state revenues to accommodate other priorities and campaign spending promises.

Gonzalez reacted to the Supreme Judicial Court (SJC) by saying he would propose "another progressive way to generate meaningful revenue." Pressed more recently about specific ways he would raise revenue, Gonzalez responded by saying he would propose his new way to generate revenue in his first budget, but he did not offer specifics. If elected, he added, he would immediately direct the state Department of Revenue "to develop recommendations to accomplish the goal of generating new revenue from those in this state who are doing very well and who today pay the lowest percentage of their income in taxes."

"There will be a very clear choice for voters in this election: a choice between someone who is only there for the privileged and the powerful, and someone who will fight for all the 'little guys' out there; a choice between someone who is dragging Massachusetts backwards, and someone who will make Massachusetts a leader again," Gonzalez said in a statement, using some of the same language he used in his response three weeks earlier to the SJC ruling.

Gonzalez, who also supports a carbon pricing reform that some equate to a new tax, did not respond when asked to confirm there would be no concrete revenue plan until after he's elected, but it appears that will be the case.

In addition to expanding arts funding, Massie backs plans to electrify the transit system, provide free public higher education, ensure high quality care for infants and toddlers from birth to age three and provide free pre-school to all kids beginning at age 3, expand the MassHealth insurance program, and move aggressively toward a single payer health care system.

Massie, in addition to bashing "pro-business judges" appointed to the SJC by Baker, said it was now up to House Speaker Robert DeLeo and the rest of the Legislature to draft and pass a "progressive income tax amendment" for potential consideration by voters statewide in 2022.

While Gonzalez will use a trust-me approach to new taxes during the campaign, Massie is offering voters a glimpse of proposals he'll pursue, if elected.

Massie responded to a News Service inquiry about alternative revenue-raising plans with a 1,448-word essay that included some concrete revenue proposals.

In addition to restarting a four-year process to potentially bring a redrafted surtax on wealthy households to the 2022 ballot, Massie would also adjust transportation fees "so that different vehicles pay their fair share."

Massie says registration fees for higher gross weight vehicles should be raised since heavy weight trucks and bus owners "are essentially putting huge train-like vehicles on asphalt and they do huge damage to roads that require expensive repairs." Massie said, "Adjusting these fees would go a long way to closing the overall transportation funding gap. At the same time, we should lower registration fees for people who buy fuel-efficient and electric cars that both save money and our planet."

Property transfer taxes should be explored, "which would impose a small cost when properties owned by developers and owned by investors (not home owners!) change hands," Massie said. He referenced a proposal offered in his hometown of Somerville.

Saying taxpayer dollars are "going into a collection bucket with holes in it," Massie said eliminating waste would free up money to be spent on government services. He cited fraudulent State Police overtime payments and a "sham" Baker administration report outlining anticipated costs of an underground rail link between North Station and South Station in Boston. The report, Massie alleged, "was designed to prove that this important step would cost too much."

Massie also supports a movement toward more renewable energy that he says, at full buildout, would allow Massachusetts to export electricity, "thus generating as much as $6 billion a year in new tax revenue." He said, "We need to rein in our 'public' utilities who are costing us billions of dollars by preserving a broken business model that benefits their shareholders, but not us."

Gonzalez and Massie face each other in the Sept. 4 Democratic primary, with the winner facing the winner of the GOP primary between Baker and Scott Lively.

Lively supports a "complete and permanent elimination of property tax on homes" offset by a "graduated income property tax favoring reinvestment of earnings." According to his campaign, his other fiscal policy priorities include local control of tax collection, local control of spending on most government services and a "dramatic reduction" in state bureaucracies. Lively also supports a 10 percent budget reduction in every state agency, and an annual sales tax refund that his campaign says will return 50 percent of "downsizing savings" to taxpayers with the remainder used to pay down state debt.

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